Chinese President Hu Jintao will be meeting with President Obama on Wednesday. This meeting has been given some seriously sinister overtones in the last few weeks, despite repeated efforts by both sides to ratchet down the rhetoric concerning friction between the world’s last remaining superpower and the new kid on the block.
In the United States there is an increasing obsession with the fact that China holds the majority of our foreign debt. Of all foreign holders of US Treasury Securities China ranks number one, having roughly 20 percent, or one trillion dollars, worth of our securities. This constitutes about one fourteenth of our total debt. Of course most people don’t bother to mention that Japan holds an almost identical amount of American debt, or that Great Britain holds 11 percent. No one seems to care about that at all. Why? Because it does not fit the current conspiracy theory that China is taking over the world.
Many are saying the supremacy of the United States and the once much-vaunted dollar are in eclipse and that China will soon rule the world stage. But if you have anything better than a ten minute attention span you would know that this sort of claim comes down the pike all the time. The assertion that China, which has grown by leaps and bounds in the last several years, will dominate the world economy seems reasonable now, but so did the threat of a Japanese takeover of the world in the 1980s, or the ascendancy of the European Union in the late 1990s. Japan has yet to recover from the popping of the asset price bubble that brought on the Lost Decade and the European Union will be lucky if the Euro makes it to its twentieth birthday.
So you can see why I might be skeptical about China being any sort of real threat to the United States. Yes, they did march out a stealth fighter to try and embarrass Defense Secretary Gates. Everyone forgot we have been flying operational 5th generation stealth aircraft for years now and their prototype only made it off the ground a few weeks ago. The Russian Federation is more of a threat militarily than China (their 5th generation fighter, the Sukhoi T-50, took its maiden flight over a year ago). Frankly there isn’t much that Communist China has done before us, and not much that they do better than us.